Dunedin has about $7.5 million in general fund reserves. That's $3.9 million too much — or double what city policy requires.

At a budget workshop Tuesday, city commissioners tossed out ideas on what to do with the extra $3.9 million.

Their ideas included using the money to reduce Dunedin's tax rate, giving city employees one-time bonuses, or jump-starting construction to replace outdated buildings.

"We have too much money sitting in a savings account. We have more than we'll ever need," said Commissioner David Carson, "and it's partly on the backs of our taxpayers and our employees. Those two groups need to be taken care of in this next budget cycle."

City finance director Jeff Yates said staffers who are planning next year's budget will incorporate the feedback they got Tuesday into their next presentation to commissioners in June.

Department heads have already been instructed to continue seeking ways to whittle away at costs. But City Manager Rob DiSpirito said the staff wanted commissioners' views on using reserves "as a last resort" to balance the budget.

"We'll continue to lead with efficiencies," DiSpirito said. "We want to get that number as low as we possibly can before we even think about touching reserves."

Commissioners were hesitant to give their okay to use reserves, because, so far, the city has barely touched services.

In addition, they said they're anticipating sales tax revenue to continue on the same pace or even grow next year.

Policy requires that Dunedin put a portion equivalent to 15 percent of its operating budget in savings; that would amount to nearly $3.6 million. Dunedin now has about 30 percent in reserves.

Documents show Dunedin has had more reserves than policy required since at least 2003. However, the cash level waxed and waned until 2009, when it suddenly skyrocketed.

"Frankly, I think our outlook is pretty darned good," said Commissioner Julie Ward Bujalski. "I don't see the need to even discuss reserves at this point, as it relates to balancing the budget, until we get some real numbers" about revenues and expenses incurred over the past year.

Nonetheless, Carson said the extra money came from collecting too much from taxpayers, so he'll be pushing to return it to them in the form of a 10 percent property tax rate decrease.

Commissioners also supported the idea of a one-time bonus for city employees, who haven't received raises in three years. In order to do that, Yates said, the commission would have to change its reserves policy. That's because bonuses are considered a one-time expenditure, andcurrent policy restricts reserve use to capital projects or to pay off debts.

Keyonna Summers can be reached at ksummers@sptimes.com or (727) 445-4153.